The financial world is watching for further contentiousness between United States and Chinese negotiators, as oil traders fear a potential global economic slowdown. Meanwhile, the Organization of Petroleum Exporting Countries (OPEC) is trying to push oil prices higher.
There was a time when OPEC would have been able to do that. However, the oil markets are facing several supply disruptions and yet the price is dropping.
Just in the past month we have seen Iranian oil exports fall to near zero and Venezuelan production plunge below 800,000 barrels per day. At the same time, according to officials, Libyan production could “collapse at any moment,†Kazakhstan’s largest oil field was mostly offline for maintenance and Russia has been suffering from an oil contamination problem. Production from OPEC member nations actually dropped to a four-year low in April. This news would typically signal the market to raise oil prices.
But that’s not happening, in large part because U.S. production has fundamentally changed market perception. Oil traders and the oil market have ignored any news that would send prices higher and instead responded only to fears of an economic downturn and potential resulting decrease in oil demand. WTI, the U.S. oil benchmark, fell over 20 percent from April 23 to June 5. Markets have decided that there is enough oil supply, regardless of what happens in Iran, Venezuela, Libya and Russia. This is largely because of record production from the United States.
https://thehill.com/opinion/energy-environment/447334-why-oil-prices-are-dropping-this-summerAnd that genius on the economy and high gas prices Obama...... said that we couldn't drill our way out of the problem.
